Maoist violence in Orissa has largely been a spillover from neighbouring States. Sharing borders with deeply Maoist-afflicted States like Chhattisgarh and Andhra Pradesh, Orissa has found itself constrained in dealing with the armed rebels as they progressively extend their areas of operations. While 15 of Orissa's 30 Districts have, over the years, witnessed Maoist violence and mobilization, it is the border Districts which have been the worst affected.

Orissa's southern-most District, Malkangiri shares its southern and eastern borders with Visakhapatnam, East Godavari and Khammam Districts of Andhra Pradesh, while in the west it is bordered by Chhattisgarh's Bastar District. Only its northern border retains a link with the State through the Koraput District. Spread over an area of 5,791 square kilometres, nearly 52 percent of the District is forested. The hilly terrain of the Eastern Ghats and the dense forests running through the District accentuate its remoteness and inaccessibility.

On May 1, 2007, State Home Secretary T.K. Mishra disclosed that 39 extremists, 38 police personnel and 37 civilians were killed in Orissa over the preceding seven years. According to the Union Ministry of Home Affairs (MHA), a total of 23 fatalities were recorded in 2006, compared to 17 fatalities in 2005, eight in 2004, and 16 in 2003. While the MHA does not provide District-wise break-ups of fatalities, according to the Institute for Conflict Management database, nine fatalities were reported from Malkangiri in 2006, as against five in 2005. In 2007 (till June 30), out of a total of 18 fatalities recorded in Orissa, Malkangiri alone accounts for nine. The District has already recorded the following significant incidents in 2007:

June 26: CPI-Maoist cadres targeted a communications tower of the Bharat Sanchar Nigam Limited (BSNL) at Balimela. Police said the Maoists had fixed two landmines below the tower, one of which exploded, partially damaging the installation.

June 17: CPI-Maoist cadres blew up two road rollers – one at Kapatuti village and the other at Resettlement Colony (RSC)-6 village.

June 14: Maoists tried to blow up a BSNL mobile phone tower in the Malkangiri Village (MV)-79 area, disrupting cellular phone services.

June 7: A civilian and one Central Reserve Police (CRPF) trooper were injured in an exchange of fire between a group of Maoists and CRPF personnel at Kalimela.

May 28: A government-run passenger bus was partially damaged by a CPI-Maoist-triggered claymore mine explosion at Laxmanguda.

April 29: A CRPF sub-inspector and two suspected CPI-Maoist cadres were killed in an exchange of fire near MV-79 village.

April 24: One person was killed and two others wounded in a landmine blast triggered by the CPI-Maoist cadres at MV-96 village.

March 19: Two CPI-Maoist cadres were killed in an encounter with SF personnel at Jakelkundi Forest area under Kalimela Police Station.

February 12: A CPI-Maoist cadre was killed in an encounter with the Police in Kalimela.

February 13: Three police personnel were injured as CPI-Maoist cadres opened fire targeting a Police party accompanying election officials for the first phase of the three-tier Panchayat (village local bodies) polls in Kalimela Block.

February 12: A CPI-Maoist cadre was killed in the Malkangiri District on the eve of the Panchayat elections.

January 26: A CRPF trooper was killed and two others injured in a landmine explosion triggered by CPI-Maoist cadres near MV-126 under the Kalimela Police Station limits.

Malkangiri District comes under the jurisdiction of the Andhra-Orissa Border Special Zonal Committee (AOBSZC), which was formed by the erstwhile People's War Group (now CPI-Maoist) in 2001. Maoists in Malkangiri work in close coordination with their comrades from across the borders in Andhra Pradesh and Chhattisgarh and also receive instructions from the senior command concentrated in these States – now principally in Chhattisgarh. In March 2007, it was reported that 100 hardcore armed Maoists from Chhattisgarh had sneaked into the bordering Malkangiri and Koraput Districts of Orissa. A red alert was sounded in the tribal pockets of these Districts when Police received intelligence inputs from the Bastar District of Chhattisgarh that armed Maoists were moving towards Malkangiri and Jeypore subdivision in Koraput. Official sources in Malkangiri informed SAIR that the Maoists move constantly across the borders in groups that consist of up to 300-400 members.

The Maoists function through their dalams (squads), and those operating in Malkangiri currently include the Kalimela dalam, the Poplur dalam, the Motu dalam, the Jhanjavati dalam, and the Korkonda dalam, among others. The leaders of a dalam are rotated or transferred cyclically to other dalams in different locations in order to evade the Police. These dalams recruit locals and send them to the various Maoist training centres in Andhra Pradesh and Chhattisgarh.. According to official sources, the Maoists in Malkangiri carry a range of modern weapons including AK-47s, LMGs and SLRs, in addition to pistols and .303 rifles. In addition, cadres receive specialised training in the use of landmines, grenades and bombs including a range of improvised explosive devices (IEDs). Intelligence sources indicate that the Maoists are now using high-power jammers and filters to block mobile and wireless services in the Naxalite zones.

The retreat of the State administration is evident from the impact of periodic strike calls given by the Maoists in the area. On May 21, the Maoist's AOBSZC called for a week-long strike (from May 21 to 27) in the border Districts of Orissa and Andhra Pradesh, protesting against alleged Police excesses in tribal areas and fake encounters in the Naxalite zones. The strike was total in the Malkangiri District. Normal traffic in and outside areas bordering Malkangiri, Kalimela, Chitrakonda and MV-79 areas was badly affected. Similarly, on June 26, protesting against the formation of Special Economic Zones in the country, Maoists began a two-day economic blockade in Orissa. They obstructed roads leading to Kalimela, Motu and other villages in Malkangiri by felling trees and placing huge boulders on the roads. Normal traffic was severely disrupted, in spite of claims to the contrary by the District administration.

Opium cultivation has emerged as a major source of income for the Maoists in Malkangiri. Hundreds of acres in the District, especially areas in Chitrakonda and Kalimela, have been covered under ganja (marijuana) crops, with poor tribal farmers are lured by the Maoists into this illegal cultivation with a promise of better returns. A single plant fetches as much as INR 200 for the cultivator, and according to one estimate, a plantation on about half an acre can fetch more than INR 50,000, which is far more lucrative than any other form of agricultural activity in the region. According to reports, over 10,000 quintals of ganja are produced in the Kalimela and Chitrakonda areas each year. Cultivation is maintained round the year in the Maoist-affected tribal pockets of Janvai, Pepermetla, Poplur, Maligudaodia and Manamkonda. From the Malkangiri District, ganja is exported to nearby townships in Orissa including Bolangir, Sambalpur and Rourkela, from where it is reportedly transported onwards to Nepal and Pakistan.

CRPF personnel are the mainstay of anti-Maoist operations in Malkangiri and are supported by the regular Police, personnel of the Orissa State Armed Police, the Special Operation Group and the 1 st India Reserve Battalion. In May 2007, Police in the Malkangiri District started a poster campaign highlighting atrocities by the Maoists and details of a Government package for surrendered extremists. The hoardings also reiterated the Government's commitment to protect surrendered Maoists.

On June 28, Chief Minister Naveen Patnaik, speaking in the State Legislative Assembly, claimed that the situation relating to Left Wing extremism in Orissa is better than that in the neighbouring states of Andhra Pradesh and Chhattisgarh. This, however, can at best provide cold comfort. With dense and hilly forests, a large body of trained cadres, with supporters among the local tribals and a helping hand from across the State's borders, Maoists have found it rather easy to create a serious challenge for the Security Forces and have converted Districts like Malkangiri into safe areas for their activities. Intermittent counter-Maoist operations and a weak surrender policy have proven entirely insufficient to contain this challenge, and the situation can only worsen, unless a dramatic augmentation of capacities and operations is witnessed in the District, and the enveloping area in the State and across its boundaries.